Pump and a Ponzi? Bithumb Criticized For Prematurely Listing a Cryptocurrency Created by its Developers

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Earlier this week, Bithumb, South Korea’s second-biggest cryptocurrency exchange – behind UPbit – that is known for its rigorous verification process for new cryptocurrencies, announced the airdrop of Popchain, a cryptocurrency which the global community has not heard about previously.

Two Weeks Into Development

Hankyung, one of the leading mainstream media outlets in South Korea, reported that many investors of Bithumb have requested the exchange to reconsider the listing of Popchain and initiating an airdrop to the platform’s users given that the cryptocurrency has only been in two weeks of development and 91 percent of its supply is owned by two individuals.

More importantly, an investigation into the source code of Popchain revealed that its entire source code was copied from the source code of bitcoin, Monero, and Dash, and the copyright of these cryptocurrencies are still in the source code of Popchain. Various cryptocurrency communities within South Korea heavily criticized Popchain and its development team’s plagiarism of the whitepaper and source code of other cryptocurrencies.

As of presently, Popchain is worth around $2 million. But, 91 percent of the supply is stored in two wallets. As such, investors raised concerns towards a possible ponzi scheme, as no other cryptocurrency in the global market has two individuals having more than 90 percent of the entire supply.

Why Did Bithumb Rush Listing?

Earlier this year, Bithumb created a company in Singapore to launch an initial coin offering (ICO) for the company’s own token called Bithumb Cash. South Korea banned domestic ICOs in 2017 and as a result, Bithumb moved its blockchain venture outside of South Korea.

The top three contributors of the Popchain source code are Kwuaint Li, Lialvin, and Su Mingrui, the three main developers of Bithumb Cash. In April, Bithumb stated that it may reconsider its ICO plans and for now, put the entire project to a halt.

As a cryptocurrency listed in Bithumb, ‘Popchain’ is causing controversy among investors.

Investors have started to claim that Bithumb paused its ICO plans to promote Popchain, a cryptocurrency created by its developers that control 91 percent of the cryptocurrency’s supply.

Initially, upon the introduction of Popchain, the Bithumb team said that it will use The E&M’s Popcorn TV and Celeb TV to evolve Popchain into a successful blockchain-based content service platform. Investors were attracted by the token, as Popcorn TV and Celeb TV are platforms that are already being used by millions of users.

Investors Outraged, Bithumb Cancels Listing

Investors in South Korea have been outraged by the Popchain listing and airdrop because unlike other tokens like Kyber Network, EOS, and Storm, which had to go through a rigorous verification process, Popchain, a cryptocurrency that is merely two weeks in development with source code copied from other cryptocurrencies, secured a listing on Bithumb.

When Bithumb announced its plans to list Popchain, less than 18 wallets or users had the Popchain token. To put it simply, Bithumb announced a listing of a cryptocurrency owned and held by 18 people.

Cryptocurrency investors told Hankyung that the listing of Popchain is a fraud-like operation and that Bithumb prematurely integrating Popchain.

In response, Bithumb stated that it will not list Popchain in the short-term and wait until Popchain is integrated by major cryptocurrency exchanges.